Attorney general steps into August Wilson Center case [The Pittsburgh Tribune-Review]

Oct. 31--The Pennsylvania Attorney General's office on Thursday intervened in the affairs of the financially troubled August Wilson Center for African American Culture, asking for a full accounting of the center's finances.

Attorney General Kathleen G. Kane also filed a motion asking that the foreclosure action in the Allegheny Court of Common Pleas be consolidated in orphan's court. The common pleas court granted that action.

"This is not a criminal action. This effort to help restore the center's financial stability by working with the center and Dollar Bank is part of Attorney General Kane's responsibility to oversee charities in the commonwealth. Attorney General Kane's interest in the oversight of charitable organizations is to ensure good stewardship on the part of charitable boards," Attorney General spokesman Joe Peters said.

The state's involvement adds another element of uncertainty in the fate of the nonprofit August Wilson Center, Western Pennsylvania's pre-eminent African American arts group. The Downtown center, named after the late Pulitzer Prize-winning playwright from Pittsburgh, opened in 2009. It has received more than $13 million in public subsidies.

Dollar Bank, which holds a $7 million mortgage on the center's debt, started foreclosure proceedings in September after the center defaulted on its mortgage and allowed insurance on the $40 million facility to lapse.

The bank asked an Allegheny Court Common Pleas judge to remove managers, appoint a receiver and stop the center from seeking bankruptcy protection. A hearing is scheduled Monday.

The center borrowed heavily to construct its building on Liberty Avenue to make up for a shortfall in its fundraising.

On Oct. 1, the Allegheny Regional Asset District, which uses sales tax to fund arts groups, tentatively declined to support the center for the first time in 15 years. RAD's board said it would give the center $300,000 only if it corrected its problems.

The center's 2012 audit painted a bleak picture.

Schneider Downs, the auditor, questioned whether the center could continue running and cut the value of its assets nearly in half -- from $40.6 million in 2011 to $20.5 million in 2012.

Most of that decline is linked to an "impairment fee" of $17.6 million that the audit assessed citing "continued losses and insufficient cash flows."

The center ended fiscal 2013 with a deficit of $1.8 million.

Previously, the attorney general intervened locally in disputes involving the McCune Foundation. One lawsuit against trustee Jamie Edwards concerned his decision not to sell McCune's stock in National City Bank before it plummeted and another regarding the oversight of the foundation.

Bill Zlatos is a staff writer for Trib Total Media. He can be reached at 412-320-7828 or [email protected].

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